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Brown is blamed again for recession as food costs rocket
Paul Waugh and Hugo Duncan08.04.09
GORDON BROWN today faced fresh claims that he was to blame for the recession after the Tories and the governor of the Bank of England suggested he had stoked the housing crash.
Shadow chancellor George Osborne lambasted the Prime Minister for stripping house prices from the official inflation index in 2003, a move critics believe fuelled the property market “bubble”.
The attack on Mr Brown came as new figures revealed that the cost of food rocketed last month as the weak pound continued to push up prices in the shops.
Food prices were nine per cent higher in March than a year earlier with meat and vegetables sharply up. The rise more than off-set a 1.5 per cent fall in non-food items and left overall prices in shops up two per cent on a year ago.
The British Retail Consortium, which carried out the survey, blamed the fall in the pound — which has lost nearly a third of its value in the past 18 months — for pushed up import prices.
In a speech setting out how the Conservatives would learn the lessons of the recession, Mr Osborne said that a future Tory government would look closely at including housing in the index to better reflect the real cost of living and prevent unsustainable booms.
His remarks came as it emerged that Mervyn King had also attacked the decision, taken by Mr Brown as Chancellor.
In a little-noticed section of his evidence to a Lords committee last week, Mr King said that the move had made his job setting interest rates more difficult in the run-up to the 2007 credit crunch.
Mr Osborne also used his speech to the Royal Society of Arts to claim that Mr Brown had today “hoisted the white flag” on his plans for a further big fiscal stimulus to boost the British economy.
Mr Brown appeared to concede in a newspaper interview that this month's Budget would have to focus on getting the country to balance its books once more — interpreted as paving the way for further tax rises and tighter spending.
Mr Brown told the Independent: “It is not just what we do to give real help to people and business now, but about setting a path for the future as well. We always take into account what is [the] best future for the fiscal position.”
But he also told BBC Radio 2's Jeremy Vine show that there was a myth that the UK had worse debts than other nations.
Mr Osborne said that the comments showed that Mr Brown was in “full retreat” on the idea of a major new fiscal boost to the economy in the face of opposition from G20 countries and the Bank governor. He also hinted that the Tories would restructure the banking sector into smaller institutions.
“We have banks that are not just too big to fail but too big to bail,” he said.
Mr King warned recently that the country couldn't afford a new spending splurge in the Budget. He also told the Lords economic affairs committee last week: “It would have been preferable had we stayed with an index in which house prices were still included.”
Economists believe that if housing is included in the official inflation index, consumers would see that as a brake on their behaviour.
The nine per cent year-on-year jump in food prices last month mirrored the increase in February. It compared with rises of 7.5 per cent in January and 6.2 in December, and underlined the strain on household budgets.
The figures emerged after official data confounded expectations that the country would slump into deflation. The Consumer Prices Index rate of inflation unexpectedly ticked up from three per cent to 3.2 per cent.
Reader views (38)
It's funny listening to Cameron ranting at Labour about the economic situation when it is precisely Conservative style policies of free enterprise and deregulation that have caused the whole damn mess.
If the Tory's had been in power, the same or worse state of affairs would exist - so don't be like many millions other stupid people and believe it's Labour's fault this has happened - The Tory's are just jumping on it as a vehicle to get in and drag us down like they did before.
- John Davis, Plymouth, UK
He is also responsible for the downturn in car sales leading to unemployment in the industry when he introduced the new VED Bands and then backdated them. This put millions of older cars into negative equity making them an unattractive proposition for trading up to a newer or even a new model. The problem with Brown is his mouth works faster than his brain so he does not think things through. His new electric cars stunt is just that. Something to grab a headline away from the shocking state of affairs with our economy; a something HE created. And for a man who hated travel he is doing a lot of it. Running away and hiding I would call it. But in his favour he does know he has made an absolute dogs dinner of running the country. You can see and here all that in the way he blames all his failures on the Tories.
- Albert Hall, hove england
I will never forgive Brown and the Labour party for the huge mess that they have caused, particularly affecting pensioners.My company pension rise in April was 0.9% and I have had a massive reduction in interest payments on my bank deposits. How do these morons expect pensioners to cope with the large rise in food prices etc? Now we read that the Chancellor says that there is nt enough money available to help pensioners!
- Peter, Watford UK
IT WAS THATCHER THAT ALSO STARTED THE TREND WHEN SHE TOOK OUT MORTGAGES AND COUNCIL TAX. I NOTICE THE TORYS SAY "MAY" SO DONT HOLD YOURE BREATH. DONT KNOW WHY LABOUR AND CONSERVATIVES DONT MARRY AND BE 1 IN ALL BUT NAME
- Mikeee, peterborough uk
Time and time again, we hear GB about helping businesses, how is it then, that his office sets the multiplier for the businessrates, which has gone up again by more than 5%?
Their previous excuse was inflation, what will they say now?
Call an election, GB
- Mario Kempe, london
Call an Election Bottler Brown!
- Mark A, Warrington England
'Green Taxes' a la Nuews Liebore and Grumpy Gordon McRuin, if they get back into power in 2010, will see a few new taxes, plus ones that we have never heard of - 'Tax the Air We Breath', and a Tax on Sunlight.
Green Taxes are all very well, but the suspicion is that they will just be used as a vehicle to extract even more cash out the tax weary public.
Maybe we will be taxed on the number of times the toilet is used each and every day.
- Uncle Vanya, East Anglia Area UK
There was a time when the UK produce most of the food it required, now those days are gone and much of the blame lies with the Government. When New Labour came into power, they saw the farmers as a bastion of conservatism. It was also a sector that Labour had very little knowledge, and a series of disastrous appointment as Minister of MAFF, Cunningham and Beckett in particular(Nick Brown was a notable exception), compounded by natural (?) events like BSE sapped the strength from this sector. Labour see the countryside as a playground for the cityfolk, not as key ingredient to a potentially viable industry. Look at the policy regarding badgers and TB, etc. Unless we see some real leadership at the highest political level and appreciation that food production matters, then we will increase our dependence on imported food.
Here’s a challange - next time anyone sees a DEFRA Minister or senior official , ask him or her, what is the difference between hay and straw is?? I have asked a few in the last 10 years and very few knew.
- Jeremy E, London
Few politicians have any real idea about the cost of food as few have joined the ranks of those of us who trawl around Tesco or Sainsbury every week. Subsidised meals at Westminster and expense accounts for other locations ensure that they are well fed and watered. awahen you live on a diet that regularly includes sirloin steak or Dover Sole with asparagus, you are no expert on food prices.
- George, Cambridge UK
Mr Brown has today been on the BBC saying that we should feel better off as food prices have come down. He also said that fuel prices are down, less than a few days after he introduced extra taxes on them.
Which country does he live in?
- Ian, Reading, England
I thought the US was the reason for the recession?
- Lynn, USA
Green taxes up = Black economy up = Tax take down
Some lessons still not learnt.
- Dave Davies, Basingstoke
Well it isn't much of a surprise, people have been saying for years that Brown has been running the country into the ground, it's only now that this view is making it into the popular press.
His policies as Chancellor and now as PM have emphasised borrowing and he sold off our gold reserves when the price was at rock bottom. Now we're all paying for it and we will be for many years to come.
Let's hope that the Tories come up with another Margaret Thatcher to take a firm hand in the economy as she did after years of mismanagement by Labour in the 70s.
- Mcw, London
Be afraid, be very afraid.
The 'green' tax cometh and we will be hammered in an attempt to fill the coffers.
Already we are taxed to the hilt and even food is rapidly becoming a problem for many families, but the biggest gambler in the world wants our last penny's for his next 'can't lose, this is the big one gamble.
Head for the hills.
- Roger, Surrey
Harold Wilson, Dennis Healey, Jim Callaghan and finally Gordon Brown all of them spent too much of other peoples money and every single time there has been a price to pay by the actual working population. Devaluation, and having to borrow huge sums of money while they spout off Harold and 'the pound in your pocket' etc Dennis and 'turn the car round we are not flying today' Jim and 'crisis what crisis' and dear old Gordon saying I'm not on the fiddle 'I pay the council tax' big deal out of his income and expenses that is very easy. What about us having to fund the council tax out of low incomes !!!
- Nick Holland, glasgow
gordon brown has run the country into the ground and he hasn't even been elected by the british public! i can't believe there hasn't been a demonstration to force an election - the whole nation is subdued by the hopelessness of the economy.
btw i hate seeing fred goodwin's smiley face in the paper, whilst the rest of us are bombarded with credit crunch gloom and doom.
- Isabel, london
No ideas Brown. Not now. Not in the past and not in the future. Stuck us in a rut of his own making.
- Albert Hall, hove england
Stagflation. Money, like water, finds its own level. Gordon won't stop it.
- Laverack, Oz
Britisher Broon is a prime example.
Cup of Tea at the commons 30p, 1st, 2nd, House paybacks.
Index linked pensions all with our money.
"Most Politicians are like nappies, they should be changed regularly and for the same reason"
- Doug, London Uk
If the Tory’s win the next election the first thing they should do is pass legislation that forces the total tax taken on any item to be displayed. So petrol would show that a litre of fuel which costs 99p, cost 28p to produce and that 71p is tax.
Then they need to publish simple accounts for each government department showing administration costs, and what the balance is spent on. It would show for instance that the Home Office can’t account for £2billion a year.
Finally the voters can then see whether a department is over manned, see its efficiency and whether it show be scrapped or supported by higher taxes. This may show that there far too many MPs and that their expenses claims need to be cut by 80%
Only when all the facts are known can a rational decision be made which can be politically justified.
- Paul, Lincoln, UK
There goes the old Sherif of Fractured Jaw, banging the clunking fist on green issues again, making concessions for electric cars and saving the planet when what he ought to be doing is getting the country back on its feet. Does he really think at this time that anyone is frankly interested in electric vehicles over their survival. Brown knows the next election is already lost and is laying the foundation for a very difficult succession by the next government.
- John Billam, London, United Kingdom
Every Labour government ends in economic catastrophe...
- Ollie, London, UK
God forbid. The problem is at home. Can't this moron get it through his thick head and start looking at home first.
What's China got to do with anything !!.
- Asw, HK
General strike anybody?
- Mr G, Leeds UK
Usual pie in the sky stuff from Brown. He uses this when he wants to divert your attention from the knife he's busily thrusting into your vitals.
These flying electric carpets he's having us all buy. Just where is the Electricity coming from? We have no spare generating capacity just a few stupid windmills and thats not going to work. Sad delusional elderly bloke he is!
What we needed in 1997/98 was lots of new nuclear power stations so they'd be on-stream now. But the idiot Government and Chancellor ignored advice at the time and refused to build new stations. What happened to that guilty Chancellor anyone recall?
However I am pleased to announce that we are currently world leaders in MP's expenses troughing, idiot governments, liars and hypocrites in power.
The usual Keith Price from Luton gag - 'Does the Prime Monster realise what nice shoes he wears....etc etc'
Nice one Keith!
- Ethan, UK
You knew it was coming 25 pct VAT, another 5p per litre petrol, 50 pct top rate tax, another
1 pct on national insurance,but hopefully only a penny on beer.
- Chris, Woking. UK
Who wasn’t under the impression that all this money had to be paid back? What, you thought it was all free? Did the government have a choice to bail out the banks? Not unless we all wanted to be queuing at a soup kitchen for the next 20 years they didn’t.
We were all happy to take the cheap money banks were offering to spend on a lifestyle we couldn't afford and we never once worried about bank regulation but when the good times stopped we all looked to the government to get us out of our collective mess. And guess what, all our excess now needs to be paid back and we need to take some collective responsibility and grow up instead of whingeing like the spoilt brats we’re become and trying to blame anyone but ourselves for the mess we got into.
- NJ, London
Err excuse me, Mr Brown the clown!
Obviously you have never heard of the law relating to "diminishing returns".
Well its about to bite you bum mate...
Tax what you like, you will not get any more money from us, people will just evade and avoid!
- George, Hempstead
I feel really hacked off if I'm going to pay even more taxes to go into MPs thieving pockets! Trouble is, the more people who lose their jobs the less people there are to pay income tax. If his lot didn't spend money like water 10 years ago we wouldn't be in such a mess as we are now, recession or no recession!
- Sue, Orpington, Kent
Tax rises, brilliant thinking. So a week ago he was talking about injecting $1trn into the global economy and now he wants to drain money through higher taxes. That must be a record even for this dysfunctional government.
- Mark, London
Last week we told that the tories were going to cut expenditure!!!!
Up the taxes so taxpayers can for his mistakes.
- Carlo Cusano, Bedford
So, her we go then. Back to old Labour tax rises to pay for bust and boom. It just shows how bankrupt both financially and morally Brown and NuLab really are. He is now huffing and puffing about 'Green' this and 'Green' that. For 'Green' read 'TAX'. That is Browns only answer, TAX it or in this case, tax US the remaining people who still have jobs in spite of his wrecking of the economy. The fact is he is backtracking on his big idea another 'fiscal stimulus' because there isn't any money left and he can't borrow any more to gamble with. The guy is a washed out con man whose arrogant boasts have come home to roost. If he wants to save the country a fortune, start by making his own ministers and MP'spay back what they have looted from the tax payer in expenses, second home allowances and all the other tax free scams he and his cronies have been pilfering for the last 12 years. Brown has already destroyed any goodwill there was as far as tax is concerned with his greedy fuel duty, VAT and his hundreds of stealth taxes. He has also destroyed any credibility in 'green' issues by hijacking the word and movement for his own sneaky tax purposes. People have grown cynical of anything he or his rabble come out with be they his 'visions' or 'British jobs for British workers' ramblings which are merely soundbites and spin. It's the ordinary tax payers who are now going to have to pay the bill for his recklessness and incompetence whilst the useless bankers walk away with £millions.
- Ed, Hants
A socialist -- through and through and through. This man has single-handedly destroyed the U.K. in many ways -- not just financially (consider his agreement to its new provincial status by ratification of the Lisbon Treaty). He seems to have an innate desire to see the U.K. demeaned as much as possible in every way possible.
- Phil Jones, London UK
Taxes, taxes, more taxes - that's all this lousy NuLabour knows how to do. Tax the people so we get more of their money to squander on pointless exercises that go nowhere or else we can claim back in expenses.
Hasn't anyone noticed that no matter what NuLabour do they always take money out of our pockets for 'Noble Cause' i.e. Green, road saftey, crime etc etc and there has never been a single gain or improvement whether in so called climate control,, or safety or terror - it's all a big con. All they know is 'Raise Taxes' as if by separating us from more of our disposable income will ever improve a thing.
Tax / spend / waste / squander /claim - that sums up NuLabour's act.
- Chris Williams, Cardiff
Hint? Its obvious that he has to raise taxes to balance the books, because he made such a pigs ear of the economy. The "best" bit is that he has to hit the vast majority of us, not just the so called rich!
Dont worry, there is an election next year and the Tories can be relied upon to clear up Labour's mess, as they always have done in the past.
Freeloaders should start worrying now because they might have to work for a living.
Enjoy!
- Dave Davies, Basingstoke
Tax rises are not the answer. This government has proved inept at using our money - look at the failed computer projects, wasted millions on failed procurement - helicopters that cannot fly, etc, etc. Rewards for failure amongst senior posts in the Public Sector, bonus payouts that are obscene. That is before we get to MPs expenses. Public sector retirement at 60 for most, on a pension that is not affordable. Cut all the politically correct non-jobs, both in central and local government. Cut all this waste first, and let the people keep their money to spend or save - that will stimulate the economy much better, and lead to higher tax receipts. Also cut the red tape burden on companies, and get rid of 90% of the employment legislation - that will encourage companies to employ people. Also simplify all the taxation legislation. Help companies and people to be economically productive and that alone will get us out of this mess. Increasing taxes at this stage will only make matters worse.
- Jeremy E, London
Each month I need to borrow money to see my familey has food to eat the last few days of the month.Tax increase,how,you already take all the money I have left.Tax non essential items,leave my third world wage alone.How do I apply to the goverment for an expense account,as this would solve all my problems if I did not have to use my wage to pay rent or replace bath plugs.
- David, london
Be very aware when Brown uses the word GREEN. This will mean that there will be lots of jam tomorrow proposals with lots of immediate pain today like taxes on 'non green' but essential items to pay for it. It will probably be like G20, lots of money talked about but no cash on the table as he has wated it all.
- Ian, Dartford, UK
